Fixed Income Investor Presentation October 2018
Further Information Ford Investor Relations Contacts: Fixed Income Investors: Karen Rocoff Justin Fischer 313-621-0965 313-390-4189 krocoff@ford.com jfisch22@ford.com Information on Ford: • www.shareholder.ford.com • 10-K Annual Reports • 10-Q Quarterly Reports • 8-K Current Reports Information on Ford Motor Credit Company: • www.fordcredit.com/investor-center • 10-K Annual Reports • 10-Q Quarterly Reports • 8-K Current Reports 2
Agenda • Corporate Overview 4 • Ford Credit 21 • Appendix 34 3
Corporate Overview 4
Financial Highlights 3% Company Revenue Driven by strong mix in NA Company Adj. EBIT* $1.7B 4.4% $ Company Adj. EBIT Margin* Flat sequentially despite lower volume 8.8% NA EBIT Margin Driven by strong mix $0.7B Ford Credit EBT Best quarter in more than 7 years $0.1B Company Adj. Op. Cash Flow* $1.4B higher YoY and $1.9B higher sequentially $23.7B $34.7B Company Cash* Liquidity Cash and liquidity balances remain strong $1.30 - $1.50 Adj. EPS* Guidance Unchanged * See Appendix for reconciliation to GAAP, calculations and definitions 5
Creating Tomorrow, Together Our Freedom of movement drives human progress. Belief To become the world’s most trusted company, Our designing smart vehicles for a smart world. Aspiration Passion for Product & Deep Customer Insight Our Plan for Value Creation Winning Propulsion Autonomous Mobility Portfolio Choices Technology Experiences Fitness Metrics Growth Operating Leverage Build, Partner, Buy EBIT Margin Capital Efficiency ROIC Cash Flow Strong Balance Sheet Our People Culture & Values 6
Strategic Highlights Progress towards freshest industry showroom Winning • U.S. – launched new Edge and Edge ST; celebrated Job 1 for Ranger which begins shipping in 2019 • Europe – strong early order bank for newly launched Focus Portfolio • China – introduced new Ford Territory mid-size SUV developed with JMC; order banks open for all-new Focus and new Escort Propulsion China strategic partnership – signed 50-50 JV agreement with Zotye to provide all-electric vehicle solutions for China ride-hailing operators Choices Europe – revealed the new Transit Custom plug-in hybrid electric vehicle (PHEV) launching in 2019 Autonomous Announced second U.S. test city – Washington, D.C. Released “A Matter of Trust” outlining Ford’s approach to AV development including safety and the application Technology of technology to solve the challenges cities face Ford, Uber and Lyft announced unprecedented commitment to SharedStreets, a data platform designed to better Mobility leverage data to improve urban mobility Transit – Europe’s top-selling light commercial vehicle brand unveils new family of products with built-in Experiences connectivity, telematics and data services solutions to help fleet customers optimize efficiency and utilization New local leadership in China bolstering depth and breadth of local talent in this key market Launched organizational redesign aimed at reducing spans, layers and complexity and enhancing efficiency Fitness New NA agency marketing lead – streamline investments, better leverage new channels and creative, increase ROI of spend Two new definitive agreements with Mahindra in India – connected cars and engine sourcing 7
Other Highlights NORTH AMERICA EUROPE MOBILITY • Transit U.S. sales were up 28% , with 35,051 • Ford brand #1 in commercial vehicle sales in • GoRide contracted with Detroit Medical vans sold – a record third quarter sales 3Q, with Transit the top-selling nameplate Center to provide its non-emergency performance and Ranger the #1 pickup transportation service ; improving the way patients get to and from appointments by • F-Series marked seven straight months of • EcoSport sales up 88% YoY providing safe and timely transportation over 70,000 sales in September while • SUV sales up 23% YoY maintaining YTD record transaction pricing • Argo named to LinkedIn’s Top Startups list of $46,600 per truck, up $1,000 YoY SOUTH AMERICA • Autonomic and Alibaba Cloud signed a • Navigator sales up over 80% overall, with Memorandum of Understanding to enhance • Consumers in Argentina chose Ford as the vehicles averaging just 18 days on dealer lots mobility experiences for Chinese consumers, #1 most-trusted brand among automakers in at the end of the third quarter; all regions marking the launch of Autonomic in China a Selecciones magazine survey improved , particularly the West, up 160% • Introduced the new Ford Ka lineup (including ASIA PACIFIC new Ka Freestyle) – the #2 best-selling • Mustang , America’s and the world’s best- vehicle in Brazil in August and September • Achieved record 3Q sales performance in selling sports car for three years running , China Lincoln and Thailand • Ford Ranked #10 company in the 2018 sold over 19,000 vehicles, up 9% YoY MERCO* Corporate Reputation survey in • Introduced new high-performance Ranger • Ford’s legendary automotive factory, the Argentina, as chosen from over 12,000 Raptor off-road pickup truck, a ground-up Rouge Center, celebrated its 100 th stakeholder responses, including consumers, Ford Performance vehicle anniversary and is preparing to produce a corporate executives and business journalists hybrid-electric F-150 in 2020 • Introduced refreshed Ranger mid-size pickup In Brazil, Ford took 4 th place in J.D. Power • survey for Service Satisfaction – up from 14 th place the year before * Developed and published by MERCO and Clarin, Argentina's largest national newspaper 8
Company Key Metrics Summary • 3Q top line mixed with revenue THIRD QUARTER YEAR TO DATE higher than a year ago 2017 2018 H / (L) 2017 2018 H / (L) • Net income at $1B, down $0.6B Wholesales (000) 1,504 1,353 (10) % 4,858 4,508 (7) % • Company adjusted EBIT at Market Share (Pct) 6.8 % 6.3 % (0.5) ppts 7.1 % 6.5 % (0.6) ppts $1.7B, down $0.6B, primarily Automotive, mainly China GAAP Revenue (Bils) $ 36.5 $ 37.6 3 % $ 115.5 $ 118.5 3 % • Company adjusted EPS at Net Income (Bils) 1.6 1.0 $ (0.6) 5.2 3.8 $ (1.4) $0.29, down $0.15; adjusted Net Income Margin (Pct) 4.3 % 2.6 % (1.7) ppts 4.5 % 3.2 % (1.3) ppts effective tax rate of 11% EPS (Diluted) $ 0.39 $ 0.25 $ (0.14) $ 1.30 $ 0.95 $ (0.35) Cash Flows From Op. Activities (Bils) 5.0 5.2 $ 0.2 14.9 13.7 $ (1.2) • Company adjusted EBIT margin at 4.4%, down 1.9 ppts; mainly AP, principally China, and Non-GAAP Europe Company Adj. EBIT* (Bils) $ 2.3 $ 1.7 $ (0.6) $ 7.6 $ 5.5 $ (2.1) Company Adj. EBIT Margin* (Pct) 6.3 % 4.4 % (1.9) ppts 6.6 % 4.7 % (1.9) ppts • Company adjusted operating Adjusted EPS* (Diluted) $ 0.44 $ 0.29 $ (0.15) $ 1.39 $ 1.00 $ (0.39) cash flow at $0.1B, $1.4B Company Adj. Op. Cash Flow* (Bils) (1.3) 0.1 1.4 1.9 1.3 (0.6) higher driven by timing Adjusted ROIC* (Trailing Four Qtrs) 12.5 % 8.2 % (4.3) ppts differences and working capital * See Appendix for reconciliation to GAAP, calculations and definitions 9
Company Key Financial Metrics Company Revenue (Bils) Company Adjusted EBIT Margin (Pct) 6.3% $42.0 $41.3 5.2% $38.9 4.9% $37.6 4.4% 4.3% $36.5 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 Company Adjusted EBIT (Bils) Company Adjusted Operating Cash Flow (Bils) $3.0 $2.2 $2.3 $0.1 $2.2 $2.0 $1.7 $1.7 $(1.3) $(1.8) 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 Note: See Appendix for reconciliation to GAAP and definitions Company Revenue Lower Than 2Q; Adjusted EBIT Margin And EBIT About Flat; Adjusted Operating Cash Flow Positive And Improved 10
3Q 2018 Company Results (Mils) $1,668 • Auto and Ford Credit results $1,402 drove net income and Company $991 adjusted EBIT $678 • Mobility reflects investments in autonomous vehicle business, as well as services development $(103) $(196) $(216) $(231) $(343) • Corporate Other includes auto interest income, net gains and Taxes / Non- Net Income Auto Mobility Ford Credit Corporate Company Interest losses on marketable securities Special Controlling (GAAP) Other Adj. EBIT* On Debt Items and corporate governance expenses B / (W) 3Q 2017 $(477) $(124) $78 $(94) $(617) $(45) $(14) $95 $(581) * See Appendix for reconciliation to GAAP and definitions 11
Automotive Key Metrics • 3Q Automotive top line mixed, with revenue higher; EBIT and THIRD QUARTER YEAR TO DATE EBIT margin lower 2017 2018 H / (L) 2017 2018 H / (L) • Global SAAR estimated to be 3% lower YoY Global SAAR (Mils) 97.0 94.3 (3) % 93.3 95.6 2 % Market Share (Pct) 6.8 % 6.3 % (0.5) ppts 7.1 % 6.5 % (0.6) ppts • Global market share lower with declines in all regions Wholesales (000) 1,504 1,353 (10) % 4,858 4,508 (7) % Revenue (Bils) $ 33.6 $ 34.7 3 % $ 107.2 $ 109.6 2 % • Lower wholesale volume due mainly to joint ventures in EBIT (Mils) $ 1,879 $ 1,402 $ (477) $ 6,449 $ 4,291 $ (2,158) China and Turkey EBIT Margin (Pct) 5.6 % 4.0 % (1.6) ppts 6.0 % 3.9 % (2.1) ppts • Revenue increase driven by favorable mix in NA Celebrating production of the 10 millionth Mustang – America’s best-selling sports car of the last 50 years 12
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